Mobile Growing, But Still Not Preferred Channel

Trends in mobile banking were a big topic at the CEB Tower Group Financial Services Technology conference.

While mobile banking adoption is growing steadily, it is still rarely used as a primary banking channel by consumers, according to research from CEB TowerGroup.

This and other trends were discussed during a presentation on mobility in banking during the CEB TowerGroup Financial Services Technology conference last week given by Jason Malo, a research director in the firm's Retail Banking and Cards practice.

Malo said that according to CEB TowerGroup research, consumers "rarely" listed mobile as the number one preferred channel. "I think that was a little surprising to find out," he added. "A lot of people use [mobile banking], but not as the primary point of contact with their bank."

Malo reported that the majority of mobile bankers use the channel for alerts, with occasional transactional capability. According to a recent CEB TowerGroup survey of mobile banking consumers, 54% said the most important mobile function to them was being able to receive notification from their bank about irregular account activity or changes to their account. That was followed by 51% who reported their most important mobile function was bill pay capabilities, while 46% listed notification of low account balance as the function they most wanted from mobile banking. 43% of respondents listed remote deposit capture capabilities as what they most desired from the mobile channel.

Malo reported that the most frequent reason reported from those who don't use mobile banking was "my banking needs are already being met," at 57%. This was followed 48% who listed security concerns as the reason for not adopting mobile banking.

However, Malo added that while mobile isn't 100 percent secure, any lingering consumer fear of the channel being less secure than others is overblown. "There's so much more security built into mobile devices than previous devices," he added. "The laptop, for example, is a very open platform."

Compared to mobile banking, mobile payments "still have a ways to go" before reaching mass consumer adoption, Malo noted. He added that the U.S. "is a bit behind the curve" when it comes to mobile payments, as several different payments networks and vehicles are still competing for dominance in the still-nascent mobile payments market. Malo also said companies offering mobile payments services need to make a compelling argument to consumers to switch from their current payment methods.

"The key is, who is going to forego putting things on their credit card to go with mobile?" he asked. "That's a question that has to be addressed."

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

It's also important to keep in mind that a lot of the capabilities in online banking haven't migrated to mobile yet. People are going to use the channels with the most capabilities as their primary channel, and use mobile for quick tasks, until you can do all of the functions on mobile that you can online.